British businesses must meet the challenge of the circular economy


The environment was conspicuous by its absence from any of the mainstream campaigning ahead of the referendum, yet it is not only one of the areas most likely to be affected by the Brexit vote, but also the area where I believe business has the biggest responsibility and opportunity to act.

Many of the environmental advances in the UK have been driven by EU legislation. For example, we now recycle nearly 50pc of household waste as a result of EU directives around waste, landfill and the disposal of electrical items. Yet while I’ve been quite open in my disappointment over Brexit – and its long-term impact on UK environmental legislation is uncertain – I think it’s important to move forward and use the decision as a catalyst for greater action by business to establish the UK as a global centre of innovative solutions leading towards a zero-carbon economy.

The imperative to tackle environmental challenges cannot now simply come from EU rules that compel companies to act, but by a recognition from business that it has a key role to play to improve resource management, restore damaged ecosystems and tackle climate change to create a net positive impact on the planet and communities they serve. And it is clear that to maintain our ability to trade with the EU, we will need to demonstrate that UK business is achieving the high environmental standards which the EU have set.

No business operates in isolation, and engaging in this new green economy also helps to nurture small firms

The debate on how to address environmental challenges has intensified in recent months, heightened by last year’s COP21 climate-change talks in Paris and the establishment of the UN’s Sustainable Development Goals. We can seem locked in an endless debate to understand the scale of the challenge, and indeed I have sat around many a table bringing leaders together to explore the issues. However, we need to move beyond theorising and take practical action which tackles economic, social and environmental challenges in a joined-up way.

That is why I am so excited that the idea of a circular economy has moved from being a fad to central to many companies’ business strategies. We’re now seeing many more firms looking at ways to be more resource-efficient and create more cost-effective business models that contribute to a stronger UK economy and minimise the impacts of climate change.

Circular economy principles are a radical way of rethinking waste and turning it into wealth by “closing the loop” of product life-cycles, increasing recycling and re-use and finding ways to develop new products and services that keep resources circulating around the economy. There is evidence that this can boost competitiveness, drive economic growth and create new jobs. With research suggesting that the circular economy is set to be worth €500bn by 2025, the potential is vast.

Asda helps suppliers find new ways to use resources more efficiently

Forward-thinking businesses are adopting these circular economy principals and turning them into practical solutions that make economic sense and help to ensure the long-term sustainability of their businesses. PwC, for example, has implemented a range of initiatives from compostable coffee cups, offering a take-back service for uniforms worn by suppliers in their offices and refurbishing old computers, generating additional revenue of over £500,000 per year. Sky reports saving £7m a year by repairing and refurbishing satellite boxes, and waste management firm Veolia generates £158.5m (19pc of its revenue) through “circular” products.

I also believe that the environment is inextricably linked to both the economic success of the UK and social cohesion within our communities. We saw the EU referendum highlight high levels of disaffection across many of our communities with unemployment, skills shortages and lack of community cohesion among factors driving the Leave voters. These are all issues that business can have as great a role in addressing as government. A circular economy will create employment, as business will need a workforce with the skills to recondition and remanufacture goods, and support new models of production. As companies develop new approaches to re-use of resources, they can provide training and create new employment opportunities locally. No business operates in isolation, and engaging in this new green economy also provides opportunities to nurture small enterprises. Asda, for example, helps suppliers find new ways to use resources more efficiently. In one year, its suppliers saved over £4m and Asda is protecting its future supply chain.

Action in isolation, however, is not enough. Collaboration is essential; through supply chains, across industry sectors, with government and NGOs.

Business in the Community, with its clear focus on inspiring collaborative and practical business action on climate change, is helping business to achieve the kind of smart growth which will underpin much wider economic and social change. In light of Brexit, I am particularly pleased to be working with the charity to launch a Circular Economy Taskforce. The taskforce will bring together businesses including PwC, Wallgreens Boots Alliance, Anglian Water, Asda, Veolia, Saint Gobain, Viridor and Interserve to tackle these very issues and take action on our environment and in our local communities. The Prince of Wales has long been an advocate for business-led action on the environment and tonight he will meet the founding members at Business in the Community’s Responsible Business Awards gala dinner as the taskforce is launched.

As we try to navigate our way towards an independent UK, I would urge all UK companies to ensure that they think about how addressing some of our most pressing environmental challenges can create new commercial opportunities and start to reap the savings that adopting circular economy principals can bring.

Thinking more creatively about how to collaborate more closely on this agenda and most importantly become the action leaders who will ensure that UK Plc retains its global competitiveness and continues to drive environmental innovation and achievement has never been more important.


Sir Ian Cheshire is the chairman of Debenhams, Government lead non-executive, and chairman of the Business in the Community environment leadership team




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